Snapshot: USD/CHF is trading at 0.7850, up 0.43% on the session, as the SNB’s active easing posture continues to weigh on the Swiss Franc. Schlegel’s recent remarks did not rule out a return to negative rates if disinflation overshoots, keeping downward pressure on the currency. Focus shifts to the 10:00 ET ISM Manufacturing PMI release for potential USD catalysts.
- Watch for a break above intraday high of 0.7851; failure to breach this level may signal a temporary pullback.
- Risk lies in a surprise hawkish shift from the Fed, potentially stemming from stronger-than-expected US data today.
Bias into NY: We favour further USD/CHF upside while the SNB maintains its dovish stance and headline CPI remains near zero. Look for a test of 0.7875 if the ISM data supports a stronger dollar, amplified by the US-CH 10Y yield spread at +404bp.